Anna
How are Management Consulting and Investment Banking different?
#banking #consulting
7 answers
Avi S
Avi’s Answer
Ann Gianoglio Burk, MBA
Ann’s Answer
Hi Anna,
This is a great question. Management deals more with how you run your business or lead your staff. Whereas, Investment banking deals more with the management of money. So you will want to decide if you are more interested in the business side, or the financial side. Check out O*Net to get a little more information on each. I have included the link in the next steps. Good luck!
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Maria Martinez
Maria’s Answer
Management Consulting covers a wide array of industries, and essentially, your job differs based on which project and client you are on. Your job is very dynamic and changes regularly, and you are essentially a "doctor" for the business. The client tells you what issues it is facing, or a vision it wants to achieve, and you as a consultant, put together a plan of action in order for the business to best achieve its goals by utilizing its capabilities and maximizing them.
In Investment Banking, your industries are more limited since you work with a specific type of client, and your job can tend to be a lot more defined than that of a consultant. Your job tasks can involve a lot of financial modeling such as performing Discounted Cash Flows, WACC, Return on Investments, among other models.
Lastly, the cultures vary significantly as well as the lifestyles so be sure to research into those as well and see which is the best fit for you. Both are great careers so whichever you choose, you will have a bright future!
David’s Answer
This is a great question! I myself work in strategy consulting and have friends working in investment banking / consulting at some of the bigger firms (Goldman Sachs, Morgan Stanley, JP Morgan Chase, and McKinsey & Company, BCG, Bain).
In consulting, you're primarily helping clients across a wide array of industries solve critical business problems. The problems you're tackling vary widely, anywhere from purchasing a company (M&A) to re-organizing a company's staff to cut costs and increase efficiency. Like others have mentioned, consulting usually involves traveling the client site Monday through Thursday. You'll have lots of in-person meetings and face time with the client.
In banking, you're usually part of a group / team that specializes in a specific industry. For example, a close friend of mine is part of the technology, media, and telecommunications (TMT) team at a large bank, and all of the deals he works on fall under those three categories. Bankers act more so as financial advisors helping their clients raise capital and assist with M&A activity. You won't be trying to fix company x's operations or strategizing on how best to increase revenues; rather, you'll be helping company X go public and IPO (initial public offering).
In both consulting and banking, the work is fast-paced and hours are usually long (perhaps slightly longer in banking than consulting). That being said, both jobs have the potential to accelerate your professional growth and learning in amazing ways.
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Joanna Corneanu
Joanna’s Answer
Management Consulting covers a wide array of clients and verticals - from Financial Services to Healthcare. Consulting in general covers service offerings that can help existent/potential clients to achieve their business goals. Investment Banking does not necessarily refer to consulting. You can have investment banking as a vertical/horizontal of management consulting, however, in general terms, investment banking is really a division of a bank or financial institution that serves governments, corporations, and institutions by providing underwriting and mergers and acquisitions advisory services. Investment banks act as intermediaries between investors (who have money to invest) and corporations (who require capital to grow and run their businesses).
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Yazan Hijazin
Yazan’s Answer
Management Consultancy is analysing, researching, advising clients on their own business (a wide set of clients although you can specialise in a certain sector or a group of related sectors). Your are basically diagnosing a company or a business line to arrive to the best set of recommendations, strategies and solutions to client's problems. Knowledge of OPERATIONS is very important. Of course digital transformation, digital marketing, new technological irruptions are always the main source requests for management consultancy. THE CLIENT DECIDES TO TAKE ACTION here not you. They decide what to do with your reports and recommendations. You are not being evaluated based on your continuous performance.
Investment Banking is TAKING ACTION on behalf the client. The client trusts you to use your knowledge and expertise in order to invest on his behalf and generate a minimum rate of return on their money invested with you through many many investment vehicles. You are continuously evaluated based on your performance. Higher Risk Involved here. You need to accumulate lots of knowledge in Investment tools like Stocks, Bonds, Trusts, Funds, Private Equity, Mergers and Acquisitions..etc. The basic abstract concept is BUYING LOW and SELLING HIGH.
Emitom Hillsman
Emitom’s Answer
Hi Anna,
I work in management consulting so I can't speak to investment banking as much, but typically consulting is more client facing at all levels. I go to a client site Monday through Thursday and work directly with my clients every day. My friends in investment banking go to their firm's office every day and it is only their more senior leaders who work directly with their clients.
Additionally, as discussed above, consulting covers a wide range of industry and subject matters, while investment banking is more narrow. I work with technology, media, and telecommunications clients on their human capital issues, but my friends at my same company work on healthcare operations issues.
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